Employer NI calculator 2026/27
Calculate the true cost of employing someone, including employer National Insurance contributions at the 2026/27 rate of 15%. See both the annual and monthly NI cost for any salary.
Employer NI cost
£4,500/year
£375/month
Employer NI rates 2026/27
Employers pay Class 1 Secondary National Insurance at 15% on each employee's earnings above the Secondary Threshold of £5,000 per year (£96 per week, £417 per month). This rate applies for the full 2026/27 tax year.
Employer NI is entirely separate from employee National Insurance. It is an additional cost on top of the employee's gross salary and does not appear as a deduction on the employee's payslip. The employee is unaffected by it directly, though it forms a significant part of the total cost of employment.
| Annual salary | Employer NI | Total cost |
|---|---|---|
| £20,000 | £2,250 | £22,250 |
| £25,000 | £3,000 | £28,000 |
| £30,000 | £3,750 | £33,750 |
| £35,000 | £4,500 | £39,500 |
| £40,000 | £5,250 | £45,250 |
| £50,000 | £6,750 | £56,750 |
| £60,000 | £8,250 | £68,250 |
| £80,000 | £11,250 | £91,250 |
| £100,000 | £14,250 | £114,250 |
Employment Allowance
Most employers can claim the Employment Allowance, which reduces their employer NI bill by up to £10,500 per tax year in 2026/27. This is claimed through your payroll software and automatically offsets against your monthly employer NI liability.
You cannot claim the Employment Allowance if:
- Your employer NI liability was £100,000 or more in the previous tax year
- You are a sole director company with no other employees on the payroll
- You employ someone for personal, domestic or household work (such as a nanny or cleaner)
- You are a public body or business doing more than half your work in the public sector
For small businesses with total employer NI below £10,500, the Employment Allowance effectively eliminates the entire employer NI bill. This calculator shows the gross employer NI before any Employment Allowance offset.
Other on-costs to consider when hiring
Employer NI is the largest additional cost on top of salary, but there are others to budget for:
- Employer pension contributions — auto-enrolment requires a minimum employer contribution of 3% of qualifying earnings (between £6,240 and £50,270). Many employers contribute more.
- Apprenticeship Levy — employers with an annual pay bill above £3 million pay 0.5% of their total pay bill as the Apprenticeship Levy.
- Benefits in kind — providing benefits such as a company car, private healthcare or interest-free loans creates a Class 1A NI liability of 13.8% on the taxable value of those benefits.
Frequently asked questions
When did employer NI increase to 15%?
The employer NI rate increased from 13.8% to 15% from 6 April 2025, as announced in the Autumn Budget 2024. At the same time, the Secondary Threshold was reduced from £9,100 to £5,000 per year. Both changes significantly increased the cost of employment for many businesses.
Does employer NI apply to all types of pay?
Employer NI applies to most forms of pay including basic salary, overtime, bonuses, commission and statutory sick pay above the threshold. Some payments are exempt, including reimbursed business expenses, pension contributions paid directly into a registered scheme, and certain redundancy payments up to £30,000.
Is employer NI tax deductible?
Yes. Employer NI contributions are a deductible business expense for corporation tax and income tax purposes. This reduces the net cost — for a company paying 25% corporation tax, every £1 of employer NI effectively costs £0.75 after the tax deduction.
Does salary sacrifice reduce employer NI?
Yes, and this is one of the main financial benefits of salary sacrifice pension schemes for employers. When an employee sacrifices salary in exchange for a pension contribution, the employer's NI bill is reduced because the employer NI is calculated on the lower post-sacrifice salary. Employers often pass some or all of this saving back to the employee's pension pot.